The Government offers a variety of corporate tax incentives in Singapore for business activities that are run within the country, particularly small and medium businesses. These corporate tax incentives were initiated to enhance the country’s technological and economic development, and they are available to a wide range of industries, including manufacturing, trading, shipping, financial, and investment services. These incentives are provided in the form of tax exemptions or tax rate reductions.
Below is a list of the various corporate tax incentives that you as a business owner may be eligible for.
Table of Contents:
Manufacturing and Services Industry
You may be eligible for a corporate tax incentive if you can demonstrate to the government that you have developed an innovative technology or skill set that will revolutionize your sector, and you are the first in Singapore to apply for the solution. You can also receive one if you can show that your business development will benefit Singapore’s economy.
The two schemes are the Pioneer Certificate Incentive (PC) and Development Expansion Incentive (DEI). These incentives can be applied via the Singapore Economic Development Board.
1. Pioneer Certificate Incentive (PC)
This incentive is available to businesses and companies who can demonstrate that their expertise is significantly more advanced than what is already available in Singapore. The corporate tax incentive is a concessionary tax rate of 5% for up to five years.
2. Development and Expansion Incentive (DEI)
If you can demonstrate that your company’s expansion and development would boost Singapore’s economy, you can qualify for the Development and Expansion Incentive. For the next ten years, you will be subject to a 5% tax rate.
Banks and Insurers
Several tax incentive options are available for those within the banking and insurers industry. However, these are provided only for those companies that are significantly boosting the economy of Singapore.
1. Finance and Treasury Centre (FTC) Incentive
The Finance & Treasury Centre (FTC) incentive is for businesses that provide services in corporate finance advisory, foreign exchange, management of interest rate, etc. The relief offered under this category is a reduced corporate tax rate of 8% on income. You will need to apply for this incentive at the Singapore Economic Development Board.
2. Financial Sector Incentive (FSI) Scheme
The Financial Sector Incentive (FSI) Scheme is available for financial institutions that are licensed, and that performs a mix of corporate and business functions. These are eligible to receive several concessionary tax rates for headquarter services, loans, and fund management. Applications are sent to the Monetary Authority of Singapore.
3. Insurance Business Development (IBD) Scheme
The Insurance Business Development (IBD) Scheme is for insurance companies and businesses that are licensed and that offer services in claims handling, risk consulting, etc. Those who qualify will receive a concessionary tax rate of up to 10%. Applications are also sent to the Monetary Authority of Singapore.
Related Read: Corporate Tax Benefits for Singapore Companies | Taxation Guide »
Research, Development, and Innovation
Companies that qualify for corporate tax incentives under this category are those that are running projects designed to bring innovative approaches, and that are researching ways to enhance industrial skills.
All businesses that are eligible for these corporate tax incentives are required to file their applications with the Singapore Economic Development Board.
1. Research Incentive Scheme For Companies (RISC)
The Research Incentive Scheme for Companies (RISC) is open for businesses and companies that conduct research and development in the field of science and technology. The corporate tax relief that is available to them is in the form of co-funding support up to 30% for eligible project costs, such as training, consultancy, manpower, etc.
2. Training Grant For Company (TGC)
The Training Grant for Company (TGC) is for companies that develop the capability of their manpower by application of new technologies, professional and industrial skills, and know-how. These also receive the support of up to 30% for costs such as overseas training expenses and trainee salaries.
3. Intellectual Property (IP) Development Incentive (IDI)
The Intellectual Property (IP) Development Incentive (IDI) is offered to businesses that conduct expansionary projects, and that meet the mandatory economic commitments. These qualify to receive a reduced corporate tax rate of either 5% or 10% of their qualifying intellectual property income.
Businesses that are eligible for this corporate tax incentive are those that are involved in trading and that have shown substantial achievements in this field. Applications are sent to the International Enterprise Singapore
1. Global Trader Programme
The Global Trader Programme is for companies that have a good track record, operate mostly in Singapore, and that trade various commodities and other things internationally. These receive corporate tax relief of a concessionary tax rate of 10% or 5% for 3-5 years.
2. Approved Cyber Trader
This incentive is designed for companies that carry out international marketing and trading on the internet, host a website, and have personnel in Singapore. These qualify to receive a concessionary tax rate of up to 10%.
In Singapore, shipping companies are also eligible for various corporate tax incentives from the government, as long as they demonstrate a good business history and have a good business plan. These can apply to the Maritime and Port Authority of Singapore.
1. Approved International Shipping Enterprise
The Approved International Shipping Enterprise (MSI-AIS) is provided to shipping companies that have a good track record, and have a good business plan for enhancing shipping operations within Singapore. Those shipping companies that are eligible receive a corporate tax exemption, while international freight and logistic operators receive a concessionary tax rate of 10%.
2. MSI-Maritime Leasing Award
The MSI – Maritime Leasing (MSI-ML) Award is for shipping companies that have a good business plan and can show that their operations will significantly contribute to Singapore’s economic growth. You can apply for a 10% tax concession.
3. MSI – Shipping-related Support Services Award
The MSI – Shipping-related Support Services (MSI-SSS) Award is for companies that can demonstrate a good business plan and have ancillary shipping activities within Singapore and can qualify for a 10% tax concession.
Need more information on industry and sector-specific corporate tax incentives?
Consult our taxation specialists, who will help you navigate and optimise your corporate tax incentives.